Energy & Grid

Xi Yang, Chris P. Nielsen, Shaojie Song, and Michael B. McElroy. 2022. “Breaking the “hard-to-abate” bottleneck in China’s path to carbon neutrality with clean hydrogen.” Nature Energy. Publisher's VersionAbstract
Countries such as China are facing a bottleneck in their paths to carbon neutrality: abating emissions in heavy industries and heavy-duty transport. There are few in-depth studies of the prospective role for clean hydrogen in these ‘hard-to-abate’ (HTA) sectors. Here we carry out an integrated dynamic least-cost modelling analysis. Results show that, first, clean hydrogen can be both a major energy carrier and feedstock that can significantly reduce carbon emissions of heavy industry. It can also fuel up to 50% of China’s heavy-duty truck and bus fleets by 2060 and significant shares of shipping. Second, a realistic clean hydrogen scenario that reaches 65.7 Mt of production in 2060 could avoid US$1.72 trillion of new investment compared with a no-hydrogen scenario. This study provides evidence of the value of clean hydrogen in HTA sectors for China and countries facing similar challenges in reducing emissions to achieve net-zero goals.
Shaojie Song, Haiyang Lin, Peter Sherman, Xi Yang, Chris P. Nielsen, Xinyu Chen, and Michael B. McElroy. 2021. “Production of hydrogen from offshore wind in China and cost-competitive supply to Japan.” Nature Communications, 12, 6953. Publisher's VersionAbstract
The Japanese government has announced a commitment to net-zero greenhouse gas emissions by 2050. It envisages an important role for hydrogen in the nation’s future energy economy. This paper explores the possibility that a significant source for this hydrogen could be produced by electrolysis fueled by power generated from offshore wind in China. Hydrogen could be delivered to Japan either as liquid, or bound to a chemical carrier such as toluene, or as a component of ammonia. The paper presents an analysis of factors determining the ultimate cost for this hydrogen, including expenses for production, storage, conversion, transport, and treatment at the destination. It concludes that the Chinese source could be delivered at a volume and cost consistent with Japan’s idealized future projections.
Xinyu Chen, Yaxing Liu, Qin Wang, Jiajun Lv, Jinyu Wen, Xia Chen, Chongqing Kang, Shijie Cheng, and Michael McElroy. 2021. “Pathway toward carbon-neutral electrical systems in China by mid-century with negative CO2 abatement costs informed by high-resolution modeling.” Joule, 5, 10 (20 October), Pp. 2715-2741. Publisher's VersionAbstract
China, the largest global CO2 emitter, recently announced ambitious targets for carbon neutrality by 2060. Its technical and economic feasibility is unclear given severe renewable integration barriers. Here, we developed a cross-sector, high-resolution assessment model to quantify optimal energy structures on provincial bases for different years. Hourly power system simulations for all provinces for a full year are incorporated on the basis of comprehensive grid data to quantify the renewable balancing costs. Results indicate that the conventional strategy of employing local wind, solar, and storage to realize 80% renewable penetration by 2050 would incur a formidable decarbonization cost of $27/ton despite lower levelized costs for renewables. Coordinated deployment of renewables, ultra-high-voltage transmissions, storages, Power-to-gas and slow-charging electric vehicles can reduce this carbon abatement cost to as low as $−25/ton. Were remaining emissions removed by carbon capture and sequestration technologies, achieving carbon neutrality could be not only feasible but also cost-competitive post 2050.
Xi Lu, Shi Chen, Chris P. Nielsen, Chongyu Zhang, Jiacong Li, Xu He, Ye Wu, Shuxiao Wang, Feng Song, Chu Wei, Kebin He, Michael P. McElroy, and Jiming Hao. 2021. “Combined solar power and storage as cost-competitive and grid-compatible supply for China’s future carbon-neutral electricity system.” Proceedings of the National Academy of Sciences, 118, 42, Pp. e2103471118. Publisher's VersionAbstract

As the world’s largest CO2 emitter, China’s ability to decarbonize its energy system strongly affects the prospect of achieving the 1.5 °C limit in global, average surface-temperature rise. Understanding technically feasible, cost-competitive, and grid-compatible solar photovoltaic (PV) power potentials spatiotemporally is critical for China’s future energy pathway. This study develops an integrated model to evaluate the spatiotemporal evolution of the technology-economic-grid PV potentials in China during 2020 to 2060 under the assumption of continued cost degression in line with the trends of the past decade. The model considers the spatialized technical constraints, up-to-date economic parameters, and dynamic hourly interactions with the power grid. In contrast to the PV production of 0.26 PWh in 2020, results suggest that China’s technical potential will increase from 99.2 PWh in 2020 to 146.1 PWh in 2060 along with technical advances, and the national average power price could decrease from 4.9 to 0.4 US cents/kWh during the same period. About 78.6% (79.7 PWh) of China’s technical potential will realize price parity to coal-fired power in 2021, with price parity achieved nationwide by 2023. The cost advantage of solar PV allows for coupling with storage to generate cost-competitive and grid-compatible electricity. The combined systems potentially could supply 7.2 PWh of grid-compatible electricity in 2060 to meet 43.2% of the country’s electricity demand at a price below 2.5 US cents/kWh. The findings highlight a crucial energy transition point, not only for China but for other countries, at which combined solar power and storage systems become a cheaper alternative to coal-fired electricity and a more grid-compatible option.

Lu et al. is the cover article of this October issue of PNAS. Read the Research Brief.
Jing Cao, Mun S. Ho, Rong Ma, and Fei Teng. 2021. “When carbon emission trading meets a regulated industry: Evidence from the electricity sector of China.” Journal for Public Economics, 200, August, Pp. 104470. Publisher's VersionAbstract
This paper provides retrospective firm-level evidence on the effectiveness of China’s carbon market pilots in reducing emissions in the electricity sector. We show that the carbon emission trading system (ETS) has no effect on changing coal efficiency of regulated coal- fired power plants. Although we find a significant reduction in coal consumption associated with ETS participation, this reduction was achieved by reducing electricity production. The output contraction in the treated plants is not due to their optimizing behavior but is likely driven by government decisions, because the impacts of emission permits on marginal costs are small relative to the controlled electricity prices and the reduction is associated with financial losses. In addition, we find no evidence of carbon leakage to other provinces, but a significant increase in the production of non-coal-fired power plants in the ETS regions. 
Peter Sherman, Haiyang Lin, and Michael B. McElroy. 2022. “Projected global demand for air conditioning associated with extreme heat and implications for electricity grids in poorer countries.” Energy and Buildings, 268, August, Pp. 112198. Publisher's VersionAbstract

Human-induced climate change will increase surface temperatures globally over the next several decades. Climate models project that global mean surface temperature could increase by over 2˚C by 2050 relative to the preindustrial period, with even greater changes at the regional level. These temperature changes have clear and pertinent implications for extremes, and consequentially, heat-induced health issues for people living in particularly hot climates. Here, we study future projections in the demand for AC globally in the 2050s associated with extreme heat events. To do this, we employ an ensemble of CMIP6 models under high and low emissions scenarios. We find that the increasing frequency of extreme temperatures will cause a significant portion of the global population to be exposed to conditions that require cooling. This issue will be especially pervasive in poor countries such as India and Indonesia, which at present lack the AC units required to handle rapidly growing populations and increased frequencies of extreme temperatures. The electricity needed for cooling in these countries could reach as high as 75% of the current total annual electricity demand, which could place serious strain on the electricity grid infrastructure during peak cooling hours. We conclude that demand for cooling in the future will pose a significant challenge for poorer countries whose people will require AC units to handle extreme temperatures. In some countries, the grid infrastructure is insufficient at present to meet projected AC demands, and this need must be considered in future power systems planning.

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